As we had expected, the manufacturing sector registered its first positive growth figure after four consecutive months of contraction, albeit by only 1.5% y/y and 0.3% m/m. The biggest contributor to the improvement was an 11.3% y/y improvement in basic iron and steel, metal and machinery output, which contributed a full 2 pps. We had anticipated more support from the motor vehicles, parts and accessories categories as well as from petroleum and coke and chemical output, but these categories registered just 0.6% y/y and -0.8% respectively.

Food and beverage production, which accounts for a quarter of manufactured output, was flat on a year-on-year basis, on the back of weak domestic demand. We are reluctant to read too much into the improvement as much of it was driven off a low base, and we continue to expect the sector to register its third consecutive negative GDP print for 3Q17 (year-on-year, seasonally adjusted and annualized).